Studio Theatre announced yesterday that it will spend $4.5 million to purchase housing in order to give its visiting artists and apprentices free accommodations in the increasingly expensive Logan Circle neighborhood.

The new initiative, called Artists Next Door, has already raised $2.5 million, much of it a gift from Robert and Arlene Kogod, well-known arts and education donors.

Finding affordable housing has always been a challenge for artists, but it is even more difficult in the area near Studio, where real estate prices have soared. "After a pilot apprentice program last year, we had a retreat. The participants told us they were suffering because of the high cost of living," said Joy Zinoman, the theater's founding artistic director. "Only people who had some kind of independent income could take these apprenticeships, and I just couldn't go for that."

"We really wanted to provide a level playing field for the apprentices," said Susan L. Butler, the theater's board chairman. Studio will have six apprentices this fall.

In addition, hotel prices in the neighborhood had skyrocketed and were straining the theater's budget. Studio was spending about $150,000 a season on housing for artists.

"At one time, the out-of-town artists could stay in the little hotels and we could rent small apartments. But now the hotels are $200 a night," Zinoman said. "This problem led us to impose on people. Actors were staying with people in the neighborhood and with board members. There was no end of the difficulty."

Ironically, Studio has been a catalyst in the revival around its headquarters at 14th and P streets NW. With Studio's own conversion of commercial properties and an influx of art galleries, restaurants and furniture stores, the area became a popular part of the city.

To solve its housing problem and get an additional foothold in the area, Studio officials intend to buy one property in addition to a six-apartment building on Corcoran Street NW that they recently purchased. The theater already owned four condominium units before launching the Artists Next Door initiative. "This will be less stressful on the staff, who wouldn't have to look for housing. And we have plenty of experience with renovations," Butler said.

Studio Theatre, a prizewinning laboratory for contemporary work, was founded in 1978. By 2004 it had four theaters. Studio conducted a successful capital campaign of $13 million to restore two properties adjoining its building and last year had a budget surplus of $250,000. Its operating budget is $4.5 million.

Several of this year's productions attracted capacity audiences. "Frozen," Bryony Lavery's drama about a murder and a mother's pain, sold more single tickets in one day than any other Studio show. "Caroline, or Change," Tony Kushner and Jeanine Tesori's award-winning musical set during the civil rights movement, earned a higher weekly box-office gross than any show in the theater's history and has been extended twice.

"The time is now, we are in a stable place," said Zinoman.

The Kogods pledged $2 million to the theater, $1.5 million of which will support the housing program. Other donors to the housing effort are Gilbert and Jaylee Mead and the Morris & Gwendolyn Cafritz Foundation.

The remaining $500,000 of the Kogod gift will go to an "artistic reserve fund," which Zinoman said will finance projects outside the normal budget. "For example, Neil LaBute, the playwright of 'Fat Pig,' is writing a world premiere for us. Now we could have a residency for him and give him more time to work with the actors," said Zinoman.